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Friday, August 30, 2019 CapitalPress.com 5 Trade Wheat industry waits for details on Japan deal Farmers ‘confident’ agreement will proceed without complications Top U.S. ag exports to Japan, 2018 The U.S. exported more than $12.9 billion in agricultural products to Japan, making it the fourth largest ag export market in 2018. By MATTHEW WEAVER Capital Press ($ BILLIONS OF DOLLARS ) Wheat farmers are cau- tious but optimistic in the wake of the announcement that the U.S. and Japan have agreed in principle to a new trade deal. “Great news,” said Glen Squires, CEO of the Wash- ington Grain Commission. “We certainly hope that (the agreement) is solidified and goes forward with no com- plications. We anticipate that it will.” Steve Mercer, vice presi- dent of communications for U.S. Wheat Associates, the overseas marketing arm of the industry, said his orga- nization has been told the agreement would put the U.S. on equal footing with Canada and Australia. Under the new Comprehensive and Progressive Trans-Pacific Partnership that the U.S. rejected, wheat from those countries has been priced $20 per ton lower than U.S. wheat. “That’s important because that protects our position and eliminates the cost-competitive problem that was created in this situ- ation,” Mercer said. The Japanese legisla- ture may have to review and approve the deal, likely within six weeks to two months, Mercer said. The agreement does not require congressional approval in the U.S., which means it is likely to happen much faster, Mercer said. “The Idaho wheat grow- Corn 2.8 Beef 2.1 Dan Wheat/Capital Press File Combines harvest winter wheat on the Polson farm north of Waterville, Wash., in 2016. The U.S. and Japan have announced progress on a new trade deal that includes wheat. Pork 1.6 Soybeans ers have invested much time and money developing a market for wheat in Japan,” said Blaine Jacobson, exec- utive director of the Idaho Wheat Commission. “We are pleased that a trade deal seems imminent.” It’s uncertain how far along the agreement is, observers say. President Donald Trump said it’s a done deal, but Jap- anese Prime Minister Shinzo Abe said details remain to be worked out, said Randy Fortenbery, small grains economist for Washington State University. “It’s not quite clear to me how far along it is and when we might expect it to actu- ally be resolved and signed,” Fortenbery said. Fortenbery said the hope is the deal would be simi- lar to the Trans-Pacific Part- nership. Trump withdrew the U.S. from TPP in 2017; the remaining countries proceeded with the Com- prehensive and Progres- sive Trans-Pacific Partner- ship, which went into effect December 2018. Without being in the TPP, U.S. farmers are at a trade disadvantage to competing wheat-producing countries Canada and Australia. U.S. farmers haven’t been hurt yet from the U.S. with- drawal from TPP, Forten- bery said. They continue to do business in Asia with tra- ditional customers. “I find it hard to believe we could negotiate a better deal (than TPP) because that would probably make the current TPP partners a little unhappy,” Fortenbery said. “Without any details, it’s really hard to say.” U.S. Wheat and the National Association of Wheat Growers released a statement recognizing Chief Agricultural Nego- tiator Gregg Doud and USDA Under Secretary Ted McKinney for their efforts. “We are confident because we know the peo- ple that negotiated it would not have gotten the kind of support they did to get a deal done if they didn’t fully understand the challenge,” Mercer said. Mercer also praised U.S. wheat customers in Japan who have actively been seeking a solution. “They have been using our wheat for years and years,” he said. “If they had to change, it would be a real problem for them.” “Japan is a significant Wheat 0.93 0.72 Source: USDA FAS Carol Ryan Dumas/Capital Press File The dairy industry is eagerly awaiting details of the new trade agreement with Japan. Capital Press graphic market for United States agriculture exports, making today a good day for Amer- ican agriculture,” U.S. Agri- culture Secretary Sonny Perdue said in a statement. “By removing existing bar- riers for our products, we will be able to sell more to the Japanese markets. At the same time we will able to close gaps to bet- ter allow us to compete on a level playing field with our competitors.” The wheat market isn’t likely to react with a big price increase because the deal isn’t going to mean potential new buyers, Fortenbery said. “It’s really less about improving a bad situation, it’s about maintaining a good situation,” he said. Fortenbery hasn’t seen any specific information about tariff rates or market access. Without a clear signal from both sides that every- thing has been worked out, it is possible the deal could be walked back later, Forten- bery said. U.S. dairy industry looks for equitable outcome in Japan deal By CAROL RYAN DUMAS Capital Press Sunday’s announce- ment that the U.S. and Japan came to a prelimi- nary agreement on trade is welcome news for the U.S. dairy industry. Just a week earlier, a coalition of dairy organiza- tions, companies and coop- eratives sent a letter to U.S. Trade Representative Rob- ert Lighthizer and USDA Secretary Sonny Perdue stating the urgent need to finalize an agreement. “Obviously we’re encouraged by the news of an agreement in principle with Japan,” Jaime Casta- neda, senior vice president of policy strategy and inter- national trade for the U.S. Dairy Export Council and National Milk Producers Federation. “We know dairy is included, we’ve been in lots of discussions with negotia- tors,” he said. But the organizations don’t yet know the details of the agreement, whether U.S. dairy will have the same access it would have had in the Trans-Pa- cific Partnership or as much access as the Euro- pean Union has through its agreement with Japan, he said. President Trump pulled the U.S. out of the TPP shortly after he assumed office. That agreement included the U.S., Japan and 10 other countries. It went ahead without the U.S., renamed the Com- prehensive and Progres- sive Trans-Pacific Partner- ship and went into effect for some of the countries in December. The EU-Japan Eco- nomic Partnership Agree- ment entered into force in February. USDEC, NMPF and the International Dairy Foods Association contend those agreements allowed the EU, New Zealand and Australia to position them- selves to seize sales from the U.S. dairy industry in the Japanese market. The U.S. industry still needs to determine the spe- cifics of the deal with Japan for dairy, Matt Herrick, IDFA senior vice president for executive and strategic communications, said. Tariffs limit potato export gains U.S.-Japan deal may help tree fruit By BRAD CARLSON Capital Press U.S. potato exports rose to nearly $1.83 billion and more than 1.73 million metric tons for the July-June marketing year, both record highs, Pota- toes USA reported. But the gains, 1% in value and 2.3% in volume, were held back by tariffs cou- pled with strong domestic demand. Exports rose in fresh and dehydrated categories. Fro- zen potatoes saw a slight decrease. Chips notched a small gain. Idaho accounts for about 70% of total dehydrated pro- duction, said Seth Pemsler, Idaho Potato Commission retail-international vice pres- ident. Dehydrated exports increased by 2.7% in volume. “When that category is up, it is very beneficial to the growers in Idaho,” he said. About 20% of U.S. pota- Courtesy Idaho Farm Bureau The U.S. exports rose both in value and volume in the last marketing year, but were held back by tariffs and stronger domestic demand. toes are exported, so any increase benefits U.S. grow- ers by increasing profitability and reducing potential sur- pluses, Pemsler said. Potatoes USA Chief Mar- keting Officer John Toaspern said U.S. exports were held back from larger increases despite strong growth in world demand and a short crop in the European Union, a major competitor. The U.S. dollar during the market- ing year gained 2.9% on the Euro, raising the relative cost of U.S. potatoes. Japan, mainly a buyer of frozen potatoes, was the top U.S. export market. Can- ada ranked second on high demand for fresh pota- toes destined for processing into frozen products. Mex- ico ranked third but did less export business with the U.S. Mexico’s 20% tariff on U.S. frozen fries, from June to May, drove a 25% decline in volume and a 21% drop in value. China in September imposed tariffs of 10% on U.S. fries and 25% on U.S. dehydrated potatoes. Export dollar declines were 10% and 68%, respectively. The U.S. had strong domestic demand, partic- ularly in frozen and dehy- drated categories, but a static supply of these products. By DAN WHEAT Capital Press YAKIMA, Wash. — The Pacific Northwest tree fruit industry can hope the new U.S.-Japan trade deal means access to Japan for Northwest apples, pears and more cherries, but no one knows for sure. “The Office of the U.S. Trade Representative has not yet shared the details of the agreement as they pertain to our industry,” said Mark Powers, pres- ident of the Northwest Horticultural Council in Yakima. He declined to say if he thinks the agree- ment resolves access issues. Western Growers — an association in Irvine, Calif., representing roughly half the nation’s fresh fruits, vegetables and tree nuts — issued an optimistic statement say- ing it’s pleased to learn the agreement will lead to substantial reductions in tariffs and sanitary and phytosanitary barriers to U.S. access. Japan is the third larg- est export market of U.S. agricultural goods, and the agreement will level the playing field for U.S. farmers, particularly “pro- ducers of fruits, vegetables and tree nuts,” Tom Nassif, Western Growers president and CEO, said. Japanese tariffs on some U.S. agricultural products are as high as 35% and equally import- ant are sanitary and phy- tosanitary (SPS) restric- tions blocking access, Nassif said. “The anticipated reduc- tions in tariffs and SPS barriers will result in true market gains and much needed economic relief for an industry that has already been caught in the crosshairs of trade wars on other fronts,” Nassif said, adding he applauds the efforts of President Donald Trump and Japanese Prime Minister Shinzo Abe. As U.S.-Japanese nego- tiations began in March, Washington state’s con- gressional delegation sent a letter to U.S. Trade Rep- resentative Robert Ligh- thizer calling out Japan for its “overly restrictive” SPS policies that have “drasti- cally inhibited” growers’ “ability to ship apples to this high-priority market for decades.” Stemilt Growers, in Wenatchee, ships small amounts of apples to Japan. Dave Martin, Stemilt’s export sales man- ager, has said Stemilt does it at a loss, to engage the issue and whet Japanese appetites for Washington apples. U.S. pears are blocked by SPS policies, Powers said. WE SPECIALIZE IN BULK BAGS! BAGS: • Seed Bags • Fertilizer Bags • Feed Bags • Potato Bags • Printed Bags • Plain Bags • Bulk Bags • Totes • Woven Polypropylene • Bopp • Polyethylene • Pocket Bags • Roll Stock & More! 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